FZG Capital | We are a discretionary capital provider offering first trust financing for value added or opportunistic transactions. This includes new acquisitions, recapitalizations and special situations. Capital solutions include: First Trust Deed Debt, Bridge Financing Mezzanine: Junior Mortgages & Participating Debt/Equity Equity: High Leverage Mezzanine, Preferred Equity Hard Money Lending: Bridge Loans, Distressed Value-Added Opportunities Debtor-In-Possession Loans (DIP) Super Collateralized Loans (Super C) & Triage Loans Connect with us at https://www.linkedin.com/company/thefernandezgroup/

1. How to Close MORE Commercial Deals Today!

2. Understand the Marketplace
● The Marketplace is radically
different than 2007
● Most banks aren’t really lending
● Cap rates are higher
● Gov’t loans are the easiest to
get done
● It is not about whether the
borrower is good, it is about
whether the loan can get done
● So, what is getting done?

3. ● 2 Categories of Loans-Owner Occupied Deals and
Investor Deals
● These categories have two main types of loans-
Conventional and Government
● Not going over specific guidelines but general tips
on each main program
● The market is REALLY picking up-it pays to be
Discerning
● Makes no sense to spend time with borrowers
who cannot close!

5. Owner Occupied Deals
● Easier to fund than investor
right now- BIG paradigm shift
● Does not mean where they live
● Small businesses are
increasing in strength
● Gov’t (SBA) loans are EASIER
than conventional
● Few local banks are good at
SBA loans- hence the bad
reputation

6. **New L/A up to $5M

7. ● For Real estate only, generally purchase only. No cash out. No
projections allowed, must be historical cash flow. This is a 50% first
with a bank, a 40% second from the SBA. These loans are much
tougher to get done then 7A. Rest of the rules are similar:
○ 51% O/O
○ 620 min. score
○ 1.2 DSCR, personal must cash flow
○ Will go to 90% LTV, 10% must be from the borrower’s own
seasoned funds, etc.
○ Loan amounts can now go up to $5.5 Million

8. Conventional Deals
Can only be used for deals involving Real
Estate
● Must be 25% O/O or more
● Generally going to be Available Only in
larger MSA’s, 50,000 pop. and up
● 650 min. Credit Score
● Must Cash Flow at 1.2 unless Special
Purpose Property, then generally 1.25
DSCR
● 65% max LTV (local bank may go to 75%)
(understand that with a conventional loan,
the entire loan is at risk. On an SBA loan,
75-90% of the losses are guaranteed by the
government so exposure is limited-hence,
the bank is more aggressive)

9. USDA Deals
● L/A up to $10M- (may get exceptions
higher but very rare and unique
circumstances….)
● 30 Yr. Terms for RE, 15 yrs. or useful
life for Equip., 7 yrs. Working Cap.
● Can’t be used to Relocate Jobs, C/O
to Owners…but CAN do Const.,
Working Cap…
● Need 10% Tangible Equity available
after Closing to get Approved if
existing Business, 20% if start-up
● CAN be used for Energy Projects
● Must be Rural-Populations <50,000
● 1.2 DCR
● 620 Score Min.

11. ● for Apartments
● $2 million to $50 Million Loan Amt.
● Acquisition or Refinance
● 85% LTV for purchase/80% LTV for C/O refi
● 1.18 DSCR, 35 Year Terms, Fully Amortizing,
Awesome Rates
● Non-Recourse
● 660 Credit Scores
● Downside is Time Frame (expect 4-6 months to close)

12. ● For construction and substantial rehab (at least 15% of
the finished appraised value in repairs)
● $2 million to $50 Million
● 1.11 DSCR
● 90% LTV
● Up to 40 Yrs. Fully Amortizing, Non-Recourse, Great
Rates
● 660 Credit Score
● Experience Critical
● Time Frame-6 Months Minimum

13. ● Skilled Nursing, Assisted Living Facilities, Treatment Centers, Aggregate
Care-only
● for Purchase, Refinance, New Construction or Substantial Renovation of
Healthcare Facilities
● Facility must have NO more than 25% of the units be Independent (own
kitchen and bath facilities)
● Must Provide Continuous Oversight of Residents and Offer 3 Meals a Day
● 90% LTV
● 1.11 DSCR
● Up to 40 year, Fully Amortizing, Non-Recourse
● 660 scores
● Experience a Must, 3 Plus Years Minimum
(FHA is the only source that has not adjusted to the declining values,
everyone else has including FNMA. Keep this in mind.)

14. ● Apartments primarily
● 75% LTV is the Most Generally, 80% LTV in Extremely Strong
Cases Only
● 680 Score
● 1.20 DSCR Possible BUT Everything Else Must be Rock Solid,
1.25 DSCR is Norm
● Need 9 Months of PITI in Reserves Generally
● Mixed Use OK as Long as Less Than 25% of Income from
Commercial
● 90% Occupancy Needed (otherwise a bridge loan)
● C/O Possible to 65-70% on Limited Cases, all Else Must be
Wicked Strong
● Must Have at least 3 Yrs. Landlord Experience
● Generally Non-Recourse (can get 10 year fixed, 30 year am, rates are
good)
● Minimum L/A $1M, max $25M

15. Conventional Apartment Deals
● 75% max LTV if Super Strong
(70% more likely)
● Generally the Same Guidelines
as FNMA
● L/A $250K - $2M
● 5 Yr. Fixed Balloons, 25 Yr.
Amorts, Full Recourse

17. Office, Retail, Industrial…
● 65% LTV is the Norm, 75% if
Everything Else is Strong- Purch &
R/T Refi
● C/O generally <60% LTV, must be
Good reason, the Less c/o the better
● L/A up to $5M, above that generally
Wall Street
● 1.25 is Min. DSCR, (prefer higher)
● 650 Score is Min. (Ex. need 1.4
DSCR to compensate), (680 score
pref.)
● 85-90% Occupied (otherwise Bridge)
(experience and reserves needed,
must have, but guidelines vary widely
on this depending on the source)

19. Hotels, Conv. Stores,
Restaurants…
Many lenders will not do these at all. If
they do, generally they want 5-10%
less LTV and 5% more DSCR so…
● 1.3 DSCR min.
● 65% LTV max (most prefer 55%)
● 90% Occupancy (in rental
situations)
● 660 Scores min. (prefer 680)
(should have experience, reserves,
etc…)

21. ● Gen. >$5M (no real max)
● Much Different. (deals can be broken up into pieces to combine first mortgages,
mezzanine ((like a second)), equity)
● Everything needs to be Strong (nothing marginal)
● DCR >1.3
● Generally need 1 yr. worth of Liquid Res.
● 5 yrs. Exp. Needed
● min. 680 Scores (really looking for 700)
● Special Use Properties carry much lower LTV’s
● Using a Combination of Equity, Debt, & Mezzanine, higher LTV’s
are possible
● Looking for MAJOR Players (be careful of PFS statements that have huge net
worth in real estate and almost no other liquid assets- that guy is not a player)

23. Cash Flowing
● Must Cash Flow (most prefer 1:1
minimum, 1.2 DSCR preferred)
● 6 mos. Reserves preferred
● Good Exit Strategy is KEY to
Hard Money- what is the story
and how will this get paid off in
two years or so? (hint-“going to fix
my credit then refinance” does not fly)
● 620 min. Score (prefer higher)
● 70% LTV max

24. Non-Cash Flowing
● MUST have GREAT Exit
Strategy
● 50% LTV max
● Higher Rates -generally 15% or
more
● Must have Good Net Worth
besides the Property
● 620 Score min.
● Story MUST make Sense

26. Stated Income
● $400k max L/A
● 660 min. Score
● 60% LTV or less

27. Development
● 60-65% LTCost
● Strong Exp., Reserves, &
Credit
● Resi Const. Nearly Impossible
(beware of lenders collecting
large upfronts)

28. Churches
● 3.5 x the Tithe (must be unrestricted)
● 75% max LTV Purchase
● Must Cash Flow to Support
● Increasing or Stable Revenue
● Lenders are Still Aggressive for
Const.
There are many other products that
you can do at Commercial Capital like
our self directed IRA program, loan
modification, factoring, merchant
accounts receivables, etc. These
programs help me get more deals
done…which takes us to the next big
point…..

30. How an Experienced
Commercial Broker can help
You Close More Deals…
● Nationwide Resources
● Ability to Package/Work
w/Client
● Combine Unique Products to
get Deal Done
● Overcome the “Marginal”

31. Understanding “Marginal”
● Cannot Overcome 2 Marginals
● If Deal Already Contains a
Marginal and Another min.
Guideline Exists, Proceed Very
Carefully
● Watch Out for Hard Hit States!

32. Tough Obstacles
● Bankruptcy/Foreclosure
● Scores below 600
● Cash-Out to Max
(remember, underwriters can lose their
jobs if too many loans they approve go
bad, banks can be taken over if too
many loans go bad-they look at the
deal differently than you as a
salesperson-the key is to be
aggressive getting the deal in but
screen hard like an underwriter-don’t
underwrite, but make sure it hits the
general guidelines)

34. What can you expect from us?
● Quick Screening
● Aggressive Follow-Up
● Build Up of Referral Source
● Knowledge, Experience,
Speed!

35. National Presence
● Branch to one of the largest commercial capital
companies in the country
○ 315 branches nationwide
● Both a Banker and Brokerage
● Preferred Pricing with capital sources due to volume
● Access to over 150+ proven commercial capital sources

36. Perry Fernandez, Principal
Direct: 408.203.2437
perry@thefernandezgroup.com
www.thefernandezgroup.com
The Fernandez Group | Silicon Valley, CA | USA